“Allowing currently employed banking industry executives to serve as directors on the boards of directors of Federal Reserve banks is a clear conflict of interest that must be eliminated,” according to the text of the bill, released today by Sanders, a Vermont Independent who caucuses with Democrats.

Congress created the Fed nearly a century ago with a mix of public and private features, including 12 regional banks with private banking executives on their board of directors. The structure of the central bank is under new scrutiny following a $2 billion trading loss at JPMorgan Chase & Co. whose chief executive officer, Jamie Dimon, is on the board of directors of the New York Fed.

Sanders and Boxer, a Democrat from California, plan a press conference today to discuss the legislation. Begich, a Democrat from Alaska, is a cosponsor of the bill.

The 12 regional Fed banks each have a nine-member board of directors. Six of those directors are appointed by banks that are members of the Federal Reserve System. The remaining three are appointed by the central bank’s Board of Governors in Washington.

The legislation would make all nine members appointed by the Board of Governors. The governors are political appointees, nominated by the president and confirmed by the Senate.

Employees of any firm regulated by the Fed would no longer be eligible. The legislation also says that directors and employees of the Fed system would be prohibited from owning stock or investing in any company that is regulated by the Fed system “without exception.”